Guyana’s economy is the world’s fastest growing, with a forecast GDP growth of 26.2 percent in 2020. Guyana had an average GDP growth of 4.2 percent during the previous decade, with a per capita GDP of $8,300 in 2016. The production of crude oil began in 2019.
What is Guyana’s GDP forecast for 2021?
According to Trading Economics global macro models and analysts, Guyana’s GDP is predicted to reach $4.20 billion by the end of 2021. According to our econometric models, Guyana’s GDP is expected to trend at 4.50 billion dollars in 2022.
Why is Guyana’s GDP increasing so quickly?
Guyana’s economy is expected to increase by a huge 49.7% this year, according to the latest edition of the World Bank’s “Global Economic Prospects.” At a time when the global economy is beset by numerous uncertainties, the country remains one of the fastest growing in the world.
The report, which was announced on Tuesday, shows a huge increase over the one given in June 2021, which put Guyana’s growth rate at only 23.7 percent.
This means that Guyana’s economic potential has doubled in the last several months, as measured by the country’s Gross Domestic Product (GDP).
According to a World Bank report, Guyana is the only Latin American and Caribbean country forecast to grow by double digits this year. St. Lucia, which is predicted to grow at a rate of 9.6%, is in a close second place.
Furthermore, the January 2022 study now forecasts a 25 percent growth rate for Guyana in 2023, up from the previously forecasted 23 percent. And, in the following months, even this forecast could be changed.
Meanwhile, economic growth in the Caribbean as a whole is expected to reach 7.3% this year and 5.9% in 2023. However, this isn’t necessarily good news for the area, as the research claims that the advances are largely due to Guyana’s contribution.
The World Bank emphasizes in its analysis that “the small states sample excludes commodity-reliant Guyana, which is undergoing a growth boom due to rapid offshore oil industry development.”
It also stated that omitting Guyana’s growth projections from the Caribbean would result in significantly lower expectations, with growth rates of 4.6 percent in 2022 and 4.2 percent in 2023.
This is owing to the fact that the majority of Caribbean countries rely on their tourism sectors, which have suffered substantial setbacks as a result of the ongoing spread of the new coronavirus (COVID-19) and the global pandemic it has sparked.
The report warns that the pandemic’s containment will determine the long-term viability of economic recovery in Latin America and the Caribbean, as well as elsewhere.
“A rebound in new COVID-19 cases, notably the Omicron form,” the World Bank predicts, “may temporarily hamper activity in some nations.”
Despite this, Guyana’s recovery prospects are significantly brighter, thanks to the country’s comprehensive vaccination program.
Guyana’s resiliency was demonstrated in 2021, when the country’s economy remained resilient despite the pandemic and months of severe flooding, and was able to post positive growth at the half-year mark, owing partly to contributions from the country’s booming oil-and-gas sector.
The International Monetary Fund (IMF) predicted that petroleum earnings would contribute for 38.2% of Guyana’s GDP in 2021, based on around 28 lucrative offshore finds since 2015.
In particular, total output from the petroleum sector was estimated to have climbed by 65.4 percent when compared to the same period in 2020. Furthermore, if ExxonMobil and its partners scale up oil production efforts in the following months, Guyana’s oil earnings might treble by 2025.
Minister of Natural Resources Vickram Bharrat earlier stated that Guyana could start permitting 50 oil lifts every year, each containing one million barrels of oil, resulting in an annual production of 50 million barrels of oil.
The minister explained that the enhanced lifts are possible because three extra Floating Production Storage and Offloading (FPSO) vessels are in operation. The Liza Unity, which recently arrived; the Prosperity FPSO, which is now under development; and the Yellowtail FPSO, which is scheduled to begin operations in 2026, are among them.
Furthermore, with crude prices hovering around US$80 per barrel, Guyana’s 50 oil lifts might yield up to US$4,000,000,000 (G$836,902,800,000) every year. Minister Bharrat also estimated that Guyana might earn US$85 million from its eighth oil lift, which was completed in November, assuming oil prices stay around US$85 per barrel.
“When you crunch the statistics, 50 lifts equates to a million barrels, and based on today’s oil price, if it continues along that line, you can see or have a sense of the direct proceeds coming to Guyana,” Minister Bharrat explained.
The country now holds $534 million in uninvested oil profits, which are held by the US Federal Reserve Bank.
Apart from oil, Guyana has had strong performances in a number of other sectors, including construction, which grew by 25.5 percent in the first half of 2021, reflecting increased emphasis on implementing the public sector investment program, as well as increased private sector construction, reflecting improved private sector confidence and optimism about the economy.
Outside of Latin America and the Caribbean, the World Bank predicts a significant drop in global economic growth from 5.5 percent in 2021 to 4.1 percent in 2022, and even lower at 3.2 percent in 2023.
The Bank attributed the predicted drop to the rapid spread of the Omicron coronavirus, which “indicates that the pandemic will likely continue to impede economic activity in the short future,” according to the bank.
What is Guyana’s primary source of revenue?
Guyana’s most major economic activities are agriculture and mining, with sugar, bauxite, rice, and gold accounting for 7075 percent of export revenues. However, the rice industry suffered a setback in 2000, with export revenues falling by 27% in the third quarter. Ocean shrimp shipments accounted for only 3.5 percent of overall export revenues in 1999, owing to a one-month import prohibition in the United States. Shrimp shipments increased in 2000, accounting for 11% of total export revenues through the third quarter. Timber, gems, clothes, rum, and pharmaceuticals are among the other products exported. These other exports are increasing in value.
Is Guyana wealthy or impoverished?
GEORGETOWN, GEORGETOWN, GEORGETOWN, GEORGETOWN, For more than a century, Guyana has been sheltered from the ravages of the Atlantic Ocean by a large, low seawall.
The aged old seawall is now a happy place. While looking out over dirty waters, vendors sell beer and coconut water while blaring local radio stations. Couples flirt, children play. After another 90-degree day in Georgetown’s capital city, exhausted laborers find a cool breeze.
However, for climate scientist Seon Hamer, who is standing next to the wall beneath a wild almond tree, the scene is not as serene as it appears.
The climate models have been seen by Hamer. They estimate that, in the worst-case scenario, rising sea levels will eventually reach far inland, submerging our capital city totally.
Climate change is wreaking havoc all across the world, but the implications are particularly dire for Guyana, one of the poorest countries in South America.
Despite this, the country’s future is tied to the same fossil fuels that are speeding up climate change.
ExxonMobil discovered oil off the coast of Guyana a few years ago, and it continues to do so. Drillships continue to operate just beyond the horizon, aiming for Hamer’s unsettled gaze.
According to the most recent estimations, there could be more than 10 billion barrels of oil beneath Guyana’s waters, potentially offering a bonanza to the country’s population. For a country with a fraction of Mexico’s population, that’s more than the country’s proven reserves.
As a result, Guyana is establishing itself as the world’s newest oil producer at a time when world leaders are under pressure to reduce their countries’ dependency on oil, coal, and natural gas, which is one of the key goals of the COP26 negotiations in Glasgow, Scotland.
The possibility and perils of sudden oil wealth
The Dutch invaders who reclaimed the low-lying, marshy lowlands to expand their property built the seawall that runs along Guyana’s coast.
Guyana was afterwards annexed by the British (it is now the only English-speaking republic in South America). However, old Dutch villages are said to be haunted by spirits, and the Dutch determination to regain this land from the sea is tormenting modern-day residents.
The Indigenous people of Guyana dwell far interior, while the majority of the population, who are mostly derived from enslaved Africans and indentured Indians, live around the shore. An outdated network of drainage canals and a system of marine barriers keep their lands dry.
Guyana is in grave danger: sea levels are rising at a rate several times faster than the world average, and high tides often surge over the top of the barrier, poisoning wells along the coast.
Garvin Cummings, the chief of Guyana’s Hydrometeorological Service, says, “We’ve seen a lot more high-intensity, short-duration rainfall.”
Guyana’s drainage systems are being overwhelmed by the change in rain patterns, with disastrous repercussions.
It happened again in May, when the country was pummeled by days of nonstop rain and waterways began to overflow.
“We woke up at 5 a.m. and there was the water, rising, rising,” says Chandroutie Persaud, who lives in Wash Clothes, an agricultural town along Mahaicony Creek southeast of the capital city.
Day after day, her family stacked boards inside and outside their house, raising their belongings higher and higher.
They finally conceded defeat. Persaud and her husband transferred their son, daughter-in-law, and grandchildren to a shelter after abandoning the first floor of their home.
Rice fields converted into ponds, some of which were deep enough for a 6-foot-tall man to stand in. In the waters, livestock became ill, perished, and decomposed. Fruit trees that had been meticulously tended for years were submerged. Those waves lingered for months, not days or weeks up to four months in some places.
For four months, you’ve been traveling around by boat, surviving on donated food, and staring out at the ocean, which is slowly ruining your livelihood.
“What has happened has happened,” says Vadim Harikrishna Indarpaul, a local contractor and home farmer. “We couldn’t have salvaged anything.”
He claims that the massive inundation lasted far too long. He says, “It was incredibly cruel to us.” “Truly, really,” says the speaker.
From role model to embracing oil
Guyana has long been a proponent of climate action due to its extraordinary susceptibility to climate change.
Because of its exceptional accomplishment in preserving its lush inland rainforests, Guyana is one of the few countries that has been operating as a carbon sink, collecting more emissions than it releases.
It even reached an agreement to be reimbursed for its efforts to combat climate change. Norway, an oil-rich country looking to offset its own emissions, paid Guyana to protect forests and thereby capture carbon.
The arrangement was innovative, and it was viewed as a possible model for other countries looking to commercialize their climate change efforts.
Guyana, on the other hand, is suddenly exchanging its green halo for something far more lucrative: oil revenue.
Companies had long thought there was oil off Guyana’s coasts, given the country’s proximity to oil-rich Venezuela, but no one had ever discovered it.
Exxon then decided to take a risk and hunt for oil in deeper waters. The 2015 discovery was unusual, according to one Exxon official, who compared it to a “fairy tale.” More oil has been discovered in Guyana’s waters since then.
Bharrat Jagdeo, the country’s former president and current vice president and the head of its mission to the ongoing COP26 climate talks said, “We have a narrow window to get as much as possible out.”
‘There’s nothing fair in this’
Jagdeo isn’t a climate skeptic. As president, he was the one who negotiated the arrangement with Norway to get compensated for forest carbon.
He has, however, embraced the oil business. And it’s easy to see why: after more than a decade of effort, Guyana was able to collect almost $150 million for helping to rescue the planet. The oil sector generates double that amount each year, and it’s only getting started.
It’s an inconvenient time for a country to enter the oil business. Global oil usage must decline immediately in order to avoid the worst effects of climate change. If this happens, current oil investments may not be lucrative they may become stranded assets, which are very expensive and suddenly useless.
Jagdeo is well aware of this, as he told NPR before heading to Glasgow, Scotland, for the current climate conference. He claims to be in favor of putting the oil sector out of business as soon as possible. But he doesn’t think the world will be able to pull it off.
“It’s not going to happen,” he continues, “and we don’t see it occurring anytime soon.” “I’m not optimistic that we’ll see any significant changes.”
As world leaders urge for oil to be phased out, Guyana is taking the opposite approach, subsidizing large-scale oil investments and prepared to sell petroleum to a globe still addicted on it.
It’s a difficult situation. But it’s not the only one. Oil producers and consumers all across the world are pushing for a move away from fossil fuels, despite the fact that they still use them in large quantities.
Blocking new development, according to Jagdeo, will merely safeguard the profits of existing producers such as Saudi Arabia and the United States countries that “will never give us a nickel,” as he puts it.
He points out that in the 2015 Paris Agreement, developed countries committed to spending $100 billion each year to assist underdeveloped countries in combating climate change. This promise has not been fulfilled.
And countries like Guyana are facing significant costs, ranging from barrier construction to assisting farmers in preparing for increased floods.
Guyana didn’t resort to oil because affluent countries failed to keep their commitments; the oil money would have been appealing even if the help had arrived.
But, as a result of the unfulfilled aid pledge, Jagdeo says it’s especially aggravating to hear calls for Guyana and other would-be new producers to keep their oil in the ground while countries like Saudi Arabia continue to pump and profit.
A bad deal for Guyana?
Jagdeo wants to extract billions of dollars from the oil business and use the money to help Guyana develop and adapt to climate change.
The sum of money is significant. Direct oil revenues to the government, according to Jagdeo, will reach $1 billion in a few years, accounting for more than half of the national budget, while some analysts say it may be ten times higher.
Guyana’s GDP is fast expanding across the board, and the country’s foreign minister has stated that he expects it to quintuple.
However, attaching a country’s fate to oil has always been fraught with danger. The quick inflow of oil wealth usually worsens rather than improves the economy of a developing country. The resource curse is what it’s called.
When a new oil power’s primary moneymaker sees one of its periodic price drops, the new wealth can drive corruption and strife, and a new oil power is positioned for a lot of misery.
There’s another issue to consider. Exxon received an extraordinarily good deal in Guyana. The stipulations were designed to entice oil firms to explore Guyana at a time when it was viewed as a hazardous bet.
The sweetheart bargain is starting to smell a little nasty now that oil has been discovered. The International Monetary Fund, the Inter-American Development Bank, and think tanks such as IEEFA have all pointed out aspects of the contract that favor Exxon over the government. Many lawmakers in Guyana agree that the terms are insufficient (though they disagree about who is to blame).
Guyana’s share of the revenues is initially small under the arrangement. They should theoretically increase to the billions over time, but this might take years. Given the world’s ability to drastically reduce its usage of oil, this delay could be perilous. Many critics are concerned that Guyana will not receive its due share of revenue.
Vincent Adams, the former head of Guyana’s Environmental Protection Agency, adds, “All kinds of games and antics might be played.” “We have no method, no way of monitoring and confirming,” he argues, claiming that his country just lacks the petroleum knowledge to appropriately defend its interests against experienced oil giants like Exxon.
According to third-party research, the contract’s terms are “comparable with previous deals signed in nations at similar resource-development phases,” according to ExxonMobil.
An Exxon representative commented, “Our work and the backing of the government of Guyana are the foundation of a long-term mutually beneficial relationship that has created considerable value for the people of Guyana.”
Doubting, skeptical, but going along
The Exxon agreement has also raised concerns among ordinary Guyanese. They agree that Guyana requires funds, but many are unconvinced that the oil deal will be beneficial to the country.
“The oil and gas industry contributes nothing for Guyana,” says Avery Sobers, a cab driver who is having a break along the waterfront. “The money does not return to this country to be spent.”
“Now is the time to get the oil money,” says Indarpaul, the contractor who lived in floodwaters for months. “The country’s gone… the money couldn’t fix back the country,” he adds once the oil is drilled.
Despite this, Indarpaul does not believe that the drilling should be halted completely. And in Guyana, this ambiguity, which falls short of outright opposition, is prevalent a murky mix of optimism, need, and tired skepticism.
Annette Arjoon-Martins is a pilot and conservationist who has a unique perspective on how climate change is affecting Guyana. One of the Indigenous communities with whom she has worked has already had to relocate to higher land.
She blames the oil development for failing to assist Indigenous Guyanese and for allocating too little funding to Guyana. She also believes Exxon should do more to collaborate with local environmental groups like hers to monitor ecosystem damage.
“Look, if the First World countries paid us to leave the oil in the ground and compensated us for what we would lose if we didn’t,” she continues, “that would be the ultimate remedy for me as a Guyanese.”
Even Seon Hamer, who is tormented by visions of rising oceans, refrains from demanding that Guyana halt drilling.
He thinks of all the things that oil cash may pay for as he stands by the barrier, staring out over water loaded with silt carried from deep below the Amazon. Education and health care are two important aspects of life. Energy that is generated from renewable sources. Transportation that is environmentally friendly. Agriculture that is more resilient.
Then he summarizes the type of calculations that are being performed all around the world in the terrible struggle between the future and the present.
“Basically, we have to collect funds,” he explains. “And… in the near future, the oil business would provide a significant portion of those funds.”
Camila Domonoske wrote the text. Ryan Kellman took the photos. This article was written with the help of Tamica Garnett.
How prosperous is Guyana?
This article was made possible by a collaboration with the Pulitzer Center for Crisis Reporting.
Guyana’s capital, Georgetown, has a population of about 200,000 people. Guyana’s capital has yet to reflect the country’s improving status. On potholed roadways, deep puddles of water form. Key cultural structures are in desperate need of repainting, while minimum wage employees earn little over $1 an hour.
However, the only English-speaking country in South America is experiencing an oil boom.
Guyana, which has a population of less than 800,000 people, saw some of the greatest economic growth on the world last year: more than 43 percent, according to the World Bank, when new offshore resources began production.
ExxonMobil, a subsidiary of Exxon Mobil, predicts that Guyana has at least 10 billion barrels of crude, making it one of the richest countries in the Western Hemisphere in terms of per capita wealth within the next two decades.
Guyana’s desire to exploit its oil resources, on the other hand, is colliding with the threat that climate change poses to the country’s future.
Floods earlier this year wreaked havoc on crops and ruined thousands of homes. According to the research firm Climate Central, Georgetown is one of nine major international cities that will be flooded by 2030 if greenhouse gas emissions continue at their current rate.
Guyana is striving to strike a careful balance between extracting energy to bring people out of poverty and combating the climate problem as world leaders wrap off UN climate negotiations in Glasgow, Scotland this week.
“We are a poor country that is growing.” We have a resource; we must take advantage of it,” said Kemraj Parsram, executive director of the Environmental Protection Agency, the government agency in charge of environmental protection.
What is the inflation rate in Guyana?
Guyana’s inflation rate averaged 4.52 percent between 1995 and 2022, with a high of 16.04 percent in April 1995 and a low of -1.76 percent in December 2015. Guyana Inflation Rate – real numbers, historical data, prediction, chart, statistics, economic calendar, and news are all available on this page.
Is Guyana a developing country?
Guyana is the third smallest country in South America, with a population of 758,000 people. It is both a middle-income and the third-poorest country in the Western Hemisphere. So, why is Guyana so impoverished?
Tense History and Natural Riches
The Dutch, the French, and the British have all controlled Guyana. It was designated as a British colony in 1831 and gained independence in 1966. Since then, conflicts have arisen between the country’s African and Indian populations. Political instability and corruption have resulted from these cultural differences.
Former army officer David Granger won elections in 2015, ending the People’s Progressive Party’s (PPP) hegemony. Granger’s mission has always been to eliminate corruption and racial tensions. He created the Afro-Guyanese Partnership for National Unity and the Alliance for Change, a multi-ethnic alliance.
Guyana has one of the world’s lowest deforestation rates. Over 80% of Guyana is covered in tropical rainforests, and its agricultural fields are fertile.
Natural resources, including as sugar, rice, gold, bauxite, and timber, account for 83 percent of Guana’s exports. While offshore oil has the potential to be profitable, it has reignited border issues with Venezuela.
A Fluctuating Economy
Guyana’s economy has fluctuated between periods of rapid expansion and looming calamity. Guyana was on the verge of economic disaster in 1982. After that, the country began to recover as a result of IMF-backed economic reforms. Since then, Guyana has privatized numerous state-owned enterprises, resulting in fresh investments and job creation.
Guyana’s economy was booming in the mid-1990s, with an annual growth rate of more than 6%. Drought, decreasing commodity prices, and political uncertainty slowed economic development in 1998. Growth slowed until 2005, then resumed until 2008, when global demand crashed. Beginning in 2009, the economy began to show signs of growth at a rate of 3 to 5.5 percent each year.
The People Facing Poverty
Guyana’s most recent poverty survey was conducted in 2006. According to the poll, 36% of the population lives in poverty, with 18% living in extreme poverty. In 2015, the per capita income was $4,090. The Guyanese dollar is Guyana’s currency. For one US dollar, the exchange rate is 206.55 Guyanese dollars.
Poverty is especially likely to affect children and indigenous people. According to UNICEF, 47.5 percent of Guyana’s children under the age of 16 were living in poverty in 2006. With a poverty rate of 33.7 percent, young adults aged 16 to 25 are the second most afflicted.
Poverty rates differ by region. The most affected are rural coastal settlements, followed by metropolitan areas and the rural interior. In urban areas, 13% of the population is considered poor. Rural areas have a poverty rate of 22.5 percent, approximately double that of metropolitan areas.
Why is Guyana Poor?
Guyana’s economy is expanding, and its natural resources are plentiful. While this appears to indicate affluence and job opportunities, the youth unemployment rate is over 30%. According to current estimates, the number is closer to 40.
Another element that adds to Guyana’s poverty is education. The country boasts one of the highest literacy rates in the Western Hemisphere, according to reports. Between 2008 and 2012, girls aged 15-24 had literacy rates of 93.7 percent while males had literacy rates of 92.4 percent. However, because of poor education, teacher training, and infrastructure, the functional literacy rate is considered low.
Guayana has one of the highest emigration rates in the world, according to the CIA World Factbook. More over 55 percent of Guyana’s citizens are foreign nationals. More than 80% of citizens with a higher education depart, resulting in a shortage of trained personnel, particularly in the healthcare sector. Guyana’s healthcare industry is similarly short on medical resources, in addition to a dearth of professionals.
Hope for Sustainable Growth
Guyana has the ability to lower its poverty rate. One of the first measures is to update the poverty statistics from 2006. UNICEF advises Guyana to use poverty monitoring methodologies that take into account different ages, regions, and ethnicities.
Why hasn’t Guyana progressed?
Critical Developmental Obstacles Guyana’s development and growth problems are mostly due to poor investment, which is around a third of the LAC average. The high cost of local finance, lack of access to international capital markets, and low returns on investment are all contributing factors.